Translate

Translate This Page

Friday, January 25, 2013

Several firms relying on oil and gas sector for bulk of earnings （STAR）

Friday January 25, 2013

GEORGE TOWN: Asia's growing oil and gas (O&G) drilling and
exploration activities will spearhead the growth of local companies
providing services to the O&G industry. Daya Materials Bhd and Metech Kenzai Sdn Bhd, for instance, are expecting the O&G industry to generate the bulk of their revenue and profits in 2013, while Dufu Technology Corp Bhd is enlarging its involvement in the sector to reduce dependency on its hard disk drive (HDD) component business.

Daya
Materials, with an approximate RM1.6bil contract in hand, expects its
services in the O&G industry to generate about 70% of its 2013
profits, compared with about 65% in 2012.

The
company also expects its chartered vessel from Siem Offshore, a
Norwegian company specialising in marine vessels for offshore
construction projects, to contribute significantly to its growth this
year and beyond.

“This is one of the most advanced DPDSV (dynamic
positioning dive support vessel) in the world and will enable us to
undertake major offshore construction works on a long-term basis in the
North Sea, Asia Pacific and South America.

“The
vessel, Siem Daya 1, will be launched in August 2013 and we are
currently in negotiations with several European engineering,
procurement, construction and commissioning companies who are keen to
lease this vessel, which includes our engineering and installation
services.

He said the group was working closely with an
international oil company to pursue risk-sharing contracts (RSCs) with
Petronas in the development of marginal fields as well as the enhanced
oil recovery of brownfields.

“The funding to embark on these
ventures will be raised from internal sources as well as via the capital
market. Our capital expenditure (capex) for 2013 will be skewed to
whether we win an RSC. With an RSC, obviously our expenditure for the
next two years will be very significant. If not, our expenditure will be
around RM30mil to RM50mil this year,” Mazlin aid.

Daya Materials is expected to be one of the beneficiaries of Petronas' massive capex of RM300bil over the next five years.

According
to Infield Systems' Offshore Asia Oil and Gas Market Report To 2017,
Asia is expected to be the second-highest investor in offshore capex for
oil exploration and production activities after Africa over the next
five years.

“This is why we invested in state-of-the-art
equipment to enable us to improve on our services. The O&G business
in Asia will be driven by the demand for equipment to be used for
subsea, floating production, and pipeline control system in India,
Malaysia, China, Vietnam and Indonesia,” Mazlin said.

According to the report, going forward to 2017, some 30 deepwater gas fields are expected to come onstream.

Metech
Kenzai, a blast resistance steel door and roller shutter manufacturing
specialist, expects its revenue from the O&G industry to generate
about 60% of its 2013 revenue, projected to be over RM15mil.

Its
general manager, Chris Sin Kok Yii, said the company currently had some
RM9mil worth of doors and shutters, which are British Standards
certified, to deliver to O&G companies doing onshore and offshore
oil drilling both in the country and overseas.

“We are presently
engaged in projects in Bintulu, Papua New Guinea, Brunei and Singapore,”
he said. “For the past 12 months we have completed projects for major
oil and gas players such as ExxonMobil, Chevron, Shell, Petronas and
Singapore Olefine.”

Depending on the size of the site, a normal petrochemical facility usually requires between 20 and 100 doors.

Sin
said the company invested about RM15mil over the last two years to
enhance its blast resistance steel door and roller shutter manufacturing
capacity.

Metech Kenzai manufactures from a 7,000 sq m site in
Seberang Prai, employing some 100 engineers and technicians. It exports
its products to Singapore, Vietnam, Thailand, Bangladesh, Sri Lanka, the
Middle East and Africa, and are used in the oil and gas sector,
airports and light rail transit projects.

The opportunities in
O&G activities are also drawing Dufu to leverage on its precision
tooling capabilities to produce enclosures, control and sensor
components used in the O&G and automotive industries.

“We are
enlarging our involvement in the O&G business and other areas such
as the automotive sector to reduce dependency on the HDD component
business.

“The contribution of the O&G and automotive
segments should increase to 35% this year from 30% in 2012. We are
investing RM4mil this year to increase the production of enclosures,
control and sensor components,” group chief executive officer PY Yong said.

On
the group's core business, Yong expects the production of HDD
components to drop by about 10% this year from 150 million units in
2012.

“The drop is due to the weakening demand for desktop and
laptop computers. In time of global economic challenges, it is necessary
to spread out our investments so that we are not dependent solely on
the HDD component business,” he said.